Clean business for China

12/12/2013

Finnish SMEs are looking for markets in China, especially in the cleantech sector. If they succeed, the projects will raise the profile of these companies. 'The 'big fish' are being caught using the Tekes Groove Programme.

China is waking up to cleantech. Growing energy consumption and environmental problems are compelling society to address the challenges and seek solutions to them. Finland already has a good reputation in China as a country of clean technology. This reputation is partly due to the influence of Finnish SMEs looking for growth in the huge markets of the East.

"Our targets are demanding but we have set our sights on some big customers. Although our aims are only partly realised, the effect on the company should be massive," says Mikko Kurunsaari, CEO of Gurux Oy, a firm which develops software for measuring electricity consumption.

China uses the most electricity in the world, and consumption is going up all the time. Seven nuclear power stations are under construction in the country, and last year one new coal-fired power station was built there every week.The Gurux open source products, based in Tampere, can be used to monitor what electricity is being used for - and this is a way to discover areas where energy can be saved. In the consumer market it has been found that, just by starting to measure consumption, electric power usage can be cut by as much as 10%.

"Using our software, we can also see how much electricity solar panels produce. The information helps the manufacturers of the panels to boost their effectiveness," says Kurunsaari. China is the world's biggest manufacturer of solar panels.

Clean food

The family firm Biolan Oy, which has its head office in Eura, has been seeking growth in China since 2008. The company's spearhead products are decentralised composting equipment, garden supplies and greenhouse growing media. Biolan mainly operates in the area around Suzhou and Shanghai, where 150 million well-off Chinese live within a radius of 100 kilometres.

"The new Chinese middle classes are clearing their flowerbeds at home to create useful gardens where they can grow safe vegetables. They don't trust the quality of the vegetables in the shops," says Kaj Paavola, General Manager of Biolan China.

The motive for growing one's own food is the problems with food safety in China. They are partly due to criminality, and partly to the fact that yield from soil that has become poor due to the production of just one crop is improved through the use of fertilizers and pesticides, residues from which remain in the plants.

Biolan's business in China is still in the initial phase, because the market is only now starting to emerge. Decentralised composting is as strange in China as it was 25 years ago in Finland, when Paavola began his career.

"Organic waste recycling has been suspended. It is not used for fertilizer but goes to landfill or is burnt. It's a big problem."

A Tekes project allows Biolan to invest now in the localisation of products, awareness raising and building a brand. All this is reflected in Biolan's partnerships with schools and day centres.

"We recycle their food waste and grow vegetables in the schoolyards and day care gardens using our products. That has attracted the attention of the media too," says Paavola.

Big fish landed

Biolan has received assistance from Tekes in areas such as product and business development. Gurux has developed its software and produced a survey of opportunities for business in China though Tekes projects. Both companies have taken part in the road shows put on by Finnish companies under the Tekes Groove Programme, the last one of which focused on Shanghai and Jiangsu province.

Mikko Kurunsaari thinks that these joint travel ventures are very valuable.

"The delegations have influence and open doors in a way that is different from what would be the case if you were on your own. In one day you can make contact with several potential partners. Support from Finnish partners is important if you want to make any progress," says Kurunsaari. He believes that the travel costs paid by the company are a small price to pay for what can be accomplished.

For Kaj Paavola, the trips and meetings have always resulted in a "huge pile of business cards", and potential partners have been found by going through them that would not have been discovered otherwise.

"It's great that Finnish companies are now on the move in the cleantech sector. There are some big fish to be had in China," says Paavola.